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Multi-Stepped Income Statement Directions

Multi-Stepped Income Statement Directions

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Published by Mary
Instructions for a multi-stepped income statement.
Instructions for a multi-stepped income statement.

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Published by: Mary on Jun 17, 2008
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05/09/2014

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Instructions for a Multi-Stepped Income Statement
MJC Revised 10/2011 Page 1
Love Thy Pets Inc.,Income StatementFor the Year Ended, December 31, 2011
 Sales Revenues:Sales$XXX,XXXLess: Sales returns and allowances$X,XXXSales discountsXXX X,XXXNet SalesXXX,XXXCost of Goods SoldX,XXXGross ProfitXXX,XXXOperating Expenses:Store salaries expense$XX,XXXAdministrative expenseXX,XXXAdvertising expenseX,XXXUtilities expenseX,XXXDepreciation expense
 — 
store equipmentX,XXXFreight-outX,XXXProperty tax expenseX,XXXInsurance expenseX,XXXTotal operating expensesXX,XXXIncome from operationsXXX,XXXOther Incomes and Expenses:Other Revenues and Gains:Interest revenue$XX,XXXGain from sales of assetsX,XXXOther Expenses and Losses:Interest expenseX,XXXLoss on sale of assets or casualtyX,XXX XX,XXXIncome before income taxesXX,XXXIncome tax expenseX,XXXNet Income$XX,XXX
 
Instructions for a Multi-Stepped Income Statement
MJC Revised 10/2011 Page 3
Step-by-Step Instructions
Start with the three-line header for each statement. First the name of the company, second thetitle of the statement, and last the period of which the statement is being prepared. I.e., month,quarter, or year ended.
Gross Profit Section:
1.
 
Start this section
with the heading “Sales Revenues:” placed in the left column. There
will be no dollar amount on this line in the amounts columns.2.
 
Indent the title “Sales Revenue” in the left column. Place the
dollar amount with a dollarsign in the right hand column.3.
 
On the next two lines, place “Less: Sales returns and allowances and Sales discounts.”
Place the amounts for these accounts in the middle column. Add them together and thenplace the resulting amount in the right amounts column on the same line as salesdiscounts.4.
 
Place the title “Net Sale” on the next line. The amount will result from subtracting the
total of sales returns and allowances plus sale discounts from sales. Place the amount inthe right column.5.
 
On the next line p
lace the account title “Cost of Goods Sold” then place the amount in the
right column.6.
 
On the last line of this section, place the account title “Gross Profit” in the left hand
column. Subtract cost of goods sold from the net sales to get the amount. Place theamount in the right amounts column.
Operating Expenses Section:
1.
 
Place the heading “Operating Expenses:” in this section in the left hand column. There
will be no dollar amount on this line in the amounts columns.2.
 
List the normal operating expenses from highest to lowest in the next few lines. Place theindividual dollar amounts in the middle column on the same lines as the title of theexpense.3.
 
On the next
line, place the title “Total operating expenses.” In the left column, place the
total of all the expenses.4.
 
 Now place the title “Income from operations” on this line. In the left column place the
dollar amount, that results from subtracting total operating expenses from the gross profitamount.

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